GUIDELINES FOR TOURISM INFRASTRUCTURE FUND (TIF)
1. ELIGIBILITY
1.1 Applicant
- Applicants must be registered under the Companies Act 1965 or Co-Operative Act 1970.
- Applicants must be majority-owned by Malaysians (at least 51%)
- Both Bumiputera and Non-Bumiputera enterprises may apply
- All existing and new enterprises carrying out or planning to carry out tourism infrastructure projects are eligible
- All applicants must have a minimum paid-up capital of RM10 million
1.2 Nature of Project
• All tourism infrastructure projects, i.e. projects which contribute to the development of the tourism industry are eligible. Priority shall be given to the following types of projects :-
o Integrated or regional tourism centres and complexes and facilities which provide access and/or infrastructure to tourism centres, such as access roads, cable cars, jetties and airstrips.
o Theme and/or Recreation Parks
o Safari Parks
o Marinas and Waterfronts
o Other sectors to tourism infrastructure as identified from time to time by the Federal Government and/or the Bank.
• Projects must be located in Malaysia
• Projects must be registered with the Ministry of Culture, Arts and Tourism
2. PURPOSE OF FINANCING
• To finance the incremental cost of new/existing projects excluding land and working capital
• Loans for the following purposes are not allowed
a) Refinancing*
b) Financing for :-
i. Acquisition of shares
ii. Existing assets of the company
iii. Taking over existing productive capacity
c) Financing of casinos
* except for the purpose of meeting collateral requirements, where it shall not exceed 20% of the loan amount approved.
3. TYPE OF FACILITY
3.1 Term Loan
3.2 Leasing
3.3 Private Debt Securities
3.4 Bank Guarantee
3.5 Customized Instruments
3.6 Equity-linked Instruments
3.7 Others
4. MIXED FUNDING
Financing under TIF may also be given together with facilities under other financing schemes. (the loan can be given in combination with other facilities from BPIMB or other financial institutions)
5. TERMS AND CONDITIONS
5.1 Loan Amount
- Minimum - RM 5,000,000.00
- Maximum - RM 50,000,000.00
- The loan amount shall not exceed 1/3 of the total project cost. (The minimum loan amount will be reviewed after one year of implementation i.e. after getting feedback from the industry)
5.2 Lending Rate
- 3.75% per annum computed based on annuity, yearly rest basis
5.3 Tenure of loan
- Maximum loan period - up to 15 years
5.4 Repayment terms
- The period for repayment will be determine based on the project cash flows, the economic life out of assets financed and/or terms of repayment as stipulated by the Fund provider.
- Grace period may be given and is determined based on the gestation period and the cash flow of the projects.
5.5 Additional
- Maximum gearing ratio - 3:1
- Minimum debt service coverage ratio - 1.51:1.0
- Minimum loan life coverage ratio - 2:1
- Relevant approvals from relevent authorities, such as EIA report
6. SECURITY
6.1 As per infrastructure financing policy of BPIMB. The salient features of which are :
- Full Security Coverage
- First Fixed Legal Charge
- Debenture
- Third Party Charge
- Joint and Several Guarantee Of Directors/Corporate & Bank Guarantee
- Assignment of Rights of Projects, Insurance, Assignment of revenue/proceeds etc.
7. MOF APPROVAL
7.1 All loans and financing approved by BPIMB shall be subject to final approval by Ministry of Finance (MOF).
Nature of Projects
A. Integrated or regional tourism centers and complexes and facilities which provide access and/or infrastructure to tourism centers.
Items that can be financed, amongst others :
- access roads
- cable cars
- jetties
- airstrips
- convention halls
- info centres and galleries
- special vehivles for transportation to tourism
- specialised shops related to tourism
- food & beverages outlets
Items that cannot be financed :
- hotels/chalets and other forms of accomodation
- fittings and equipments
- renovation
- refurbishment
- games machines
- riding machines
- mobiles-jet ski
- sauna
- gym equipments
- tennis court
- badminton court
- swimming pools
- golf course
B. Themes Parks
Items that can be financed, amongst others :
- construction cost
- roads
- jetties
- cable cars
- airstrips
- info centres, galleries
- ride machines
Items that cannot be financed :
- game machine
- shops
- restaurants
- hotels/chalets
C. Marina
Items that can be financed, amongst others :
- construction cost
- conventio/admin centres
- jetties
- access roads
- cable cars
- hard stand
- tools, equipment and accessories for hard stand and marina
Items that cannot be financed :
- boats
- ferries
- hotels/chalets
D. Safari
Items that can be financed, amongst others :
- construction cost
- jungle trekking routes
- roads
- jetties
- air strips
- pontoons
Items that cannot be financed :
- hotels/chalets
As a general rule, the Bank will not finance items that falls under the category of items that cannot be financed. However in cases where the projects are deemed to be of high national strategic significance, some flexibility is allowed. Projects that fall under this category are as follows :
- Project that have been accorded national priority by the Government;
- Project must signficantly contribute towards reducing social and economic disparities;
- Project must help to reduce the poverty levels and/or raise the highest possible living standards of the targeted beneficiary community and geographical coverage;
- Project must spur and generate economic activity and employment;
- Project must contribute towards enhancing socio economic productivity and economic resilience and stability;
- Project must support and contribute towards development and strengthening of industry linkages;
- Project shall significantly contribute towards sustainable national infrastructure development; and
- Project to be financed shall not be detrimental to the environment.
Projects that are of high national strategic significance or having an internal Rate of Return (IRR) of not less than 15% and is an on-going concern will be given flexibility with the items to be financed.
